Making Tax Digital for Income Tax: a checklist

Start with your qualifying income, which GOV.UK describes as your total income from self-employment and property, counted before expenses. HMRC looks at a return you have already sent: the 2024 to 2025 return decided who joined from 6 April 2026 (over £50,000), the 2025 to 2026 return decides who joins from 6 April 2027 (over £30,000), and the 2026 to 2027 return decides who joins from 6 April 2028 (over £20,000).

HMRC reviews returns each year and says that if your income is above the relevant threshold it will write to you. GOV.UK is also clear that if no letter arrives, it is still your responsibility to check. Our guide to how qualifying income works goes through what counts, including jointly owned property and partnership profits.

While you are checking, look at whether an exemption applies. Some are automatic, such as qualifying income of £20,000 or less, and others need an application. The exemptions guide covers both.

Making Tax Digital builds on Self Assessment rather than replacing your registration. To sign up you must already be registered for Self Assessment and have submitted a tax return in the last 2 years, and GOV.UK says you still need to submit a Self Assessment return for the tax year before you start using the new service. Someone who has fallen behind with returns therefore has a job to do before anything else.

GOV.UK advises making sure you have software that works with Making Tax Digital for Income Tax before you sign up, and then choosing and authorising it. HMRC does not recommend any product, but it keeps a software finder on GOV.UK that asks about your income sources and accounting period. Our guide to choosing software sets out the questions worth asking.

When you sign up, have these ready:

• the user ID and password you got when you registered for Self Assessment
• your business start date, or the date you started receiving property income
• for a sole trade, the business name, address and nature of the business
• the tax year you will start using the service
• your passport or driving licence and a mobile phone, in case HMRC asks you to prove your identity through an app

GOV.UK says that from September 2026 HMRC will start to sign up anyone who needs to use the service for 2026 to 2027 and has not done so, using only the information it already holds. GOV.UK notes that recent changes may be missing from what HMRC holds, so it is worth signing up yourself, or asking an agent to, rather than waiting.

For each item of income or expense, the software needs the amount, the date it was received or incurred, and a category. If you keep records in one product, such as a spreadsheet, and submit from another, the two must be digitally linked, for example through linked cells, a CSV file or an automated transfer, rather than by retyping figures. You still have to keep the original records or supporting documents, or copies of them, such as bank statements and invoices.

Decide too which quarterly periods you will use. The standard periods follow the tax year from 6 April. If your accounting period runs from 1 April to 31 March, GOV.UK says you should use calendar update periods, which start on 1 April and keep the same deadlines.

Each quarterly update is a running total for the tax year so far, and GOV.UK says HMRC will not receive details of individual receipts or invoices. Mistakes are fixed in your digital records and carried into the next update. You can send an update up to 10 days before a period ends if you do not expect any more transactions.

At the end of the year you complete your tax return in the software, add anything HMRC does not hold, such as savings interest, and declare that the information is correct and complete. Making Tax Digital does not change Self Assessment payment dates.

For 2026 to 2027, HMRC's penalties guidance confirms that a late quarterly update carries no penalty, but a missed tax return deadline still earns a penalty point. GOV.UK says quarterly updates earn points only for tax years after 2026 to 2027, so check the penalties page for the year you join. Once you reach 4 points you pay a £200 penalty, with another £200 for each further missed deadline. Late payment penalties are separate: in your first year you have 30 days from the payment due date before one is charged, and after that the window shrinks to 15 days.

If you would rather not work through the list alone, our Making Tax Digital service page explains how people use an accountant for some or all of the work. We read every enquiry and, where we can, will put you in touch with a local accountant; get in touch to start.